Subject of Possible Rule Making: WAC 458-20-210 Sales of tangible personal property for farming -- Sales of agricultural products by farmers and 458-20-271 Tax incentives to reduce agricultural burning.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300 and 82.01.060(2).

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Chapter 420, Laws of 2005, made a number of changes to the tax incentives for reducing agricultural burning of certain grain and grass fields. The department previously adopted a new WAC 458-20-271 (Rule 271) on an emergency basis to explain the provisions of this law change. The new rule also incorporated information related to the tax incentives available prior to the July 1, 2005, effective date of chapter 420. A revised WAC 458-20-210 (Rule 210) was also adopted on an emergency basis to remove language about the pre-July, 2005 tax incentives for reducing agricultural burning.

     The department plans to proceed with adopting a permanent Rule 271 to explain the tax incentives for reducing agricultural burning. It also plans to revise Rule 210 to remove the tax incentive information that will be addressed in Rule 271, and to recognize provisions of chapter 513, Laws of 2005. Chapter 513 changed the preferential B&O tax rate for certain manufacturing activities and sales involving fresh fruits and vegetables to a B&O tax exemption.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

     Process for Developing New Rule: Parties interested in this rule making may contact the individual listed below. The public may also participate by providing written comments throughout this rule making or giving oral testimony at the public meeting or public hearing.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, e-mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary discussion draft of a possible new or revised rule(s) is available upon request. Written comments on and/or requests for copies of the draft may be directed to Gayle Carlson, Interpretations and Technical Advice Unit, P.O. Box 47453, Olympia, WA 98504-7453, phone (360) 570-6126, e-mail GayleC@dor.wa.gov, fax (360) 586-5543.

     Date and Location of Public Meeting: Department of Revenue, 1657 Fowler Street, Richland, WA, on January 5, 2006, at 10:00 a.m.

     Assistance for persons with disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 725-7499.

December 7, 2005

Alan R. Lynn

Rules Coordinator